Smith v. Maytag Corp.

• Decision Date: 16 March 1995
• Docket Number: No. A94A1979,A94A1979
• Citation: 455 S.E.2d 379,216 Ga.App. 676
• Parties: SMITH et al. v. MAYTAG CORPORATION et al.
• Court: Georgia Court of Appeals

Page 379

455 S.E.2d 379

216 Ga.App. 676

SMITH et al. v. MAYTAG CORPORATION et al.

No. A94A1979.

Court of Appeals of Georgia.

March 16, 1995.

Stanley G. Jackson, Augusta, for appellants.

McAlpin & Henson, Kirk M. McAlpin, Jr., Pursley, Howell, Lowery & Meeks, R. Harold Meeks, Jr., Atlanta, for appellees.

ANDREWS, Judge.

Smith and Cook, sole shareholders and directors of TWS, Inc., and TWS, Inc. appeal from the trial court's grant of summary judgment to defendants Maytag Corporation, Amerivend Southeast Corporation, formerly known as The Richard Company, Inc. (The Richard Company), and Owens, a salesman for Amerivend. ¹

The summary judgment to Amerivend and Owens was awarded on the basis of res judicata, based on prior litigation initiated by Park Leasing Company against TWS, Inc. and Smith. In that suit, TWS, Inc. and Smith counterclaimed against Park Leasing and recovered on their counterclaims for violation of the Sale of Business Opportunities Act (SOBA). Park Leasing Co. v. TWS, Inc., 206 Ga.App. 864, 426 S.E.2d 620 (1992).

The grounds urged in support of the motion for summary judgment by Maytag were numerous and the order granting summary judgment does not specify its legal basis. We have examined the pleadings and record and conclude that the only issue necessary for us to consider as to Maytag is that of agency, for without that, there is no linchpin for the liability of Maytag.

1. "To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.... A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case. If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiff's claim, that claim tumbles like a house of cards. All of the other disputes of fact are rendered immaterial. [Cit.] A defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case; instead, the burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party's case." Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).

Maytag manufactures appliances, including commercial washers and dryers. As reflected in Park, supra, The Richard Company, now Amerivend, is in the business of distributing Maytag equipment, although its products are not limited to Maytag products. The following paragraph is contained in the Commercial Distributorship Agreement between Maytag and The Richard Company: "DISTRIBUTOR IS NOT IN ANY RESPECT AN AGENT, REPRESENTATIVE OR EMPLOYEE OF COMPANY, IN FURTHERANCE OF THIS FACT, DISTRIBUTOR SHALL ACCEPT FULL RESPONSIBILITY FOR ANY REPRESENTATIONS MADE TO ITS CUSTOMERS, INCLUDING BUT NOT LIMITED TO THOSE DEALING WITH QUESTIONS OF PROFITABILITY, LOCATION, FACILITIES, EQUIPMENT AND SERVICE REQUIREMENT. FURTHER, DISTRIBUTOR AGREES TO INDEMNIFY AND HOLD COMPANY HARMLESS, ..."

Maytag Financial Services Corporation (MFSC) is a wholly owned subsidiary of Maytag which is in the business of providing distributors selling Maytag products "with a means of leasing MFSC Related Products to their customers." As such, it entered into an agreement with Park Leasing Company whereby Park would provide administrative services for leases between MFSC and its lessees and would be authorized to use the name "Maytag Financial Services Corporation" in its leases. On March 15, 1989, MFSC (Park Leasing) and TWS, Inc. entered into an agreement whereby TWS would lease listed Maytag commercial laundry equipment for TWS' Laundromat in Savannah. Nine of the pieces of equipment were previously owned by Park Leasing and the other twenty-five pieces were purchased by The Richard Company from Maytag for the purpose of leasing them to TWS, Inc.

The equipment lease provided in paragraph 22: "Entire Agreement--This Lease contains the entire agreement between the parties; and no agreement, representation or inducement shall be effective to change, modify or terminate this Lease in whole or in part, unless in writing and signed by the parties. All prior conversations or writings between the parties hereto or their representatives are merged herein and extinguished."

When the laundromat was not successful, TWS, Inc. and Smith as guarantor were sued by Park Leasing Company for the remainder of the lease payments due on the equipment. TWS and Smith then counterclaimed, alleging numerous claims against Park Leasing. The judgment in TWS and Smith's favor on their counterclaim was affirmed by this court which concluded that all damages were in fact awarded under the SOBA claim. Id. This court upheld the jury's factual determination that The Richard Company was the agent of Park Leasing for purposes of the transactions with TWS and held Park Leasing responsible for representations made by Owens, The Richard Company salesman, which were alleged to be false and violative of the SOBA.

Maytag supplied product information to its distributors, including a brochure concerning the "Maytag Equipped Just Like Home Laundry." Included with this material is an explanatory letter which states "[t]his information is presented to give you ideas on how to make YOUR laundry business become the type of business you want it to be. The Maytag Company is proud of our full line of commercial laundry products. We feel that Maytag commercial laundry products should be an important part of YOUR laundry business.... This booklet is an effort to highlight some other factors [in addition to brand of machines used] which you may wish to consider. Of course, we cannot list all of the factors you need to consider and therefore we encourage you to obtain competent advice before making YOUR decisions about YOUR commercial laundry.... In an effort to help you decide to fully equip YOUR laundry with Maytag commercial laundry products, we've introduced the Maytag-equipped(R) Just Like Home(TM) laundry co-op sign program. It's not a franchise. The choices are YOURS. Ask your Maytag commercial laundry distributor what you need to do in order to be eligible for the Maytag-equipped Just Like Home laundry co-op sign program and hang 'Maytag-equipped Just Like Home Laundry' signs in YOUR laundry.... The enclosed artist's conceptions and material samples are examples of how YOUR laundry can look. The enclosed list of manufacturers is furnished as a service to you if you would like to furnish and decorate your laundry as shown in the artist's conceptions."

In response to the affirmative statement of Maytag's corporate secretary that The Richard Company was not the agent of Maytag, as opposed to Park Leasing d/b/a Maytag Financial Services, Inc., appellants present their conclusions and assumptions based, among other things, on the product brochure.

" 'The bare assertion or denial of the existence of an agency relationship is a statement of fact when made by one of the purported parties to the relationship; but when made by an outsider, bare assertions or denials are merely conclusions of law. The affidavit denying the existence of agency must be received as evidence of a fact, which cannot be overcome by conclusionary affidavits [or testimony].' [Cits.]" Thomas v. Schouten, 210 Ga.App. 244, 246, 435 S.E.2d 746 (1993).

"Where the question of agency vel non rests upon a written document and inferences deduced therefrom, ... the issue presented is a question of law for the trial court since construction of written contracts is exclusively for the judge. [Cits.] ... Under Georgia law[,] '(t)he relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf.' OCGA § 10-6-1. The historical test applied by Georgia courts has been 'whether the contract gives, or the employer assumes, the right to control the time and manner of executing the work, as distinguished from the right merely to require results in conformity to the contract.' [Cits.]" McMullan v. Ga. Girl Fashions, 180 Ga.App. 228, 229-230(2), 348 S.E.2d 748 (1986).

Even assuming, without deciding, that the Maytag/The Richard Company distributorship agreement created a franchise arrangement, the mere use by a franchisee of the franchisor's trademark does not create sufficient evidence to allow the question of apparent agency to survive Maytag's motion for summary judgment. Texaco v. Youngbey, 211 Ga.App. 789, 790, 440 S.E.2d 533 (1994); McGuire v. Radisson Hotels Intl., 209 Ga.App. 740, 742(1), 435 S.E.2d 51 (1993); McMullan, supra; Wiggins v. Home Owners Warranty Council, Etc., 168 Ga.App. 777, 310 S.E.2d 554 (1983). Also, the record does not contain admissible evidence that Maytag Corporation, as opposed to a subsidiary or other company, committed affirmative acts indicating that Park Leasing was its agent so as to justify reliance by TWS or Cook and Smith. Compare Nat. Carloading Corp. v. Security Van Lines, 164 Ga.App. 850, 853(5), 297 S.E.2d 740 (1982) and Triple "C" Recreation Assn. v. Cash, 124 Ga.App. 754, 756(2), 186 S.E.2d 145 (1971). In light of the language contained in the distributorship agreement, the trial court's grant of summary judgment to Maytag was proper, because there was no showing made that Maytag Corporation exercised such control over Park Leasing or The Richard Company to make either corporation...